Distribution Assets Draw Top Firms to Kentucky

UPS Worldport in Louisville and DHL Express in Northern Kentucky have helped establish Kentucky as a leader in fulfillment services for some of the biggest names in the shopping/shipping sector, including Amazon.com, Zappos, Best Buy and rising stars such as Gilt Groupe and Nasty Gal.

By
Jessica Walker Boehm
On Wednesday, April 17, 2013 - 10:08

Companies looking to expand distribution capabilities and boost online sales are increasingly choosing Kentucky – and with good reason.

UPS Worldport in Louisville and DHL Express in Northern Kentucky have helped establish the Bluegrass State as a leader in fulfillment services for some of the biggest names in the shopping/shipping sector, including Amazon.com, Zappos, Best Buy and rising stars such as Gilt Groupe and Nasty Gal.

"E-commerce companies are flocking to Louisville for the same reasons we did," says Christopher Halkyard, vice president of operations of Gilt Groupe, a members-only e-retailer. “Louisville offered some excellent properties in several industrial parks at competitive prices and a strong labor pool of people willing and ready to work.”

UPS Worldport: Moving Lobster

Louisville offers proximity to UPS Worldport, the world’s 10th-largest cargo operation. With more than 20,000 jobs connected to it and a $668 million annual impact on the local economy, Worldport has attracted 141 companies to its supply chain, representing an additional $600 million investment and 10,000 jobs. Worldport processes an average of 1.6 million packages a day.

And that includes lobsters. Some of the nation's finest restaurants receive their lobsters thanks to Clear Water Fine Foods, which operates the world’s largest inland lobster tank in Louisville. Nova Scotia lobsters are shipped to the company and kept in two 30-foot-by-40-foot saltwater tanks at a constant 39 degrees until they are sent via UPS to restaurants coast to coast.

Gilt Groupe typically ships between 20,000 to 30,000 units per day from its Louisville facility – items purchased online at gilt.com by tens of thousands of members who receive daily flash sale emails offering discounted prices on fashion, home decor, artisanal ingredients, activities and travel experiences and more.

“Being near Worldport makes the pickup time much later in the day, which allows us to finish our orders,” Halkyard says. “Our customers can buy at a later period during the day and still get their purchases delivered as expected.”

Gilt’s 303,000-square-foot warehouse in Louisville is one the most high-tech distribution centers in the country, with a modern material handling system including robotics. Because the company’s business model is based on flash sales, Gilt moves large quantities of specific products on a daily basis.

“We need to have some strong technology to speed through and get the products out quickly and accurately,” Halkyard says.

New e-commerce jobs are also being created by companies like Elovations Services Group LLC, which will locate its new center in nearby Boone County and create nearly 700 full-time jobs and a $13.7 million investment.

Online fashion distributor Nasty Gal plans to open a 527,000-square-foot distribution center in Shepherdsville in 2013, which is expected to generate $18 million in investment and create 300 full-time jobs. The company, started as an eBay store selling vintage clothing in 2006, has expanded its reach with an international customer base for its new and vintage clothing, shoes and accessories.

Good for Geeks

Getting items shipped quickly and accurately are also vital to the success of Geek Squad City, a state-of-the art repair and refurbishment center operated by electronics retailer Best Buy that offers a three-day turnaround that reunites customers with their technical gear.

With thousands of computers, televisions and other devices shipping from Geek Squad precincts across the country, the Bullitt County location is a centralized hub with more than 1,000 employees working out of a 240,000-square-foot facility.

Until the founding of Geek Squad City in 2006, broken gadgets had been repaired at multiple sites, including Best Buy stores and service centers, third-party repair centers and computer manufacturer locations.

“Customer service is important in any industry, and especially when customers have something to be repaired,” says Jeremy Baier, Geek Squad and Best Buy spokesman. “This is a great location for us. It is fantastic for us to be in a place where we can ship in a timely manner.”

ABOUT THE AUTHOR

Jessica Walker Boehm is a journalism graduate of Belmont University and has been a regular contributor to Livability.com since 2010.